What changed in this filing

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Item 1. Financial Statements

2022-04-21 compared with 2021-10-21 · 149 added, 236 removed, 197 unchanged (66% of the section changed)

1 unchanged sentence

PLUS THERAPEUTICS, INC.

CONSOLIDATED CONDENSED BALANCE SHEETS

CONDENSED BALANCE SHEETS

(in thousands, except share and par value data)

September 30, 2021

March 31, 2022

December 31, 2021

Current assets:

3 unchanged sentences

Property and equipment, net

Operating lease right-of-use assets

Operating lease right-use-of assets

Intangible assets, net

3 unchanged sentences

Operating lease liability

Term loan obligations, net of discount

Term loan obligation, current

Total current liabilities

Noncurrent operating lease liability

Term loan obligation

Warrant liability

4 unchanged sentences

5,000,000 shares authorized;

1,952 and 1,954 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

shares issued and outstanding at March 31, 2022 and December 31, 2021

Common stock, $ 0.001 par value;

100,000,000 shares authorized;

15,360,025 and 6,749,028 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively

and 15,510,025 issued and outstanding at March 31, 2022 and December

31, 2021, respectively

Additional paid-in capital

2 unchanged sentences

Total liabilities and stockholders’ equity

See Accompanying Notes to these Consolidated Condensed Financial Statements

See Accompanying Notes to these Condensed Financial Statements

PLUS THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS

CONDENSED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

Development revenues:

Government contracts and other

For the Three Months Ended March 31,

Operating expenses:

Research and development

In process research and development acquired from NanoTx

General and administrative

Loss on disposal of property and equipment

Total operating expenses

Loss from operations

Operating loss

Other income (expense):

1 unchanged sentence

Interest expense

Change in fair value of warrants

Total other income (expense)

Change in fair value of liability instruments

Total other expense

Net loss per share, basic and diluted

Basic and diluted weighted average shares used in calculating net loss per share attributable to common stockholders

See Accompanying Notes to these Consolidated Condensed Financial Statements

Basic and diluted weighted average shares used in calculating net loss per share

attributable to common stockholders

See Accompanying Notes to these Condensed Financial Statements

PLUS THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands)

CONDENSED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)

preferred stock

2 unchanged sentences

Stock-based compensation

Balance at March 31, 2020

Issuance of common stock for exercise of warrants

Reclassification of warrant liabilities

Issuance of common stock for in process research and development acquired from NanoTx Therapeutics

Share-based compensation

Balance at June 30, 2020

Issuance of common stock for exercise of warrants

Reclassification of warrant liabilities

Conversion of Series B convertible preferred stock into common stock

Share-based compensation

Balance at September 30, 2020

Balance at December 31, 2020

Stock-based compensation

Sale of common stock, net of offering cost

Sale of common stock, net

Conversion of Series B Convertible Preferred

2 unchanged sentences

Balance at March 31, 2021

Sale of common stock, net of offering cost

Share-based compensation

Balance at June 30, 2021

Sale of common stock, net of offering cost

Share-based compensation

Balance at September 30, 2021

See Accompanying Notes to these Consolidated Condensed Financial Statements

Balance at December 31, 2021

Stock-based compensation

Sale of common stock, net

Balance at March 31, 2022

See Accompanying Notes to these Condensed Financial Statements

PLUS THERAPEUTICS, INC.

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

CONDENSED STATEMENTS OF CASH FLOWS

(In thousands)

For the Nine Months Ended September 30,

For the Three Months Ended March 31,

Cash flows used in operating activities:

2 unchanged sentences

Amortization of deferred financing costs and debt discount

Loss on disposal of property and equipment

In process research and development acquired from NanoTx Therapeutics

Non-cash lease expenses

Change in fair value of warrants

Stock-based compensation expense

Change in fair value of liability instruments

Share-based compensation expense

Non-cash lease expense

Increases (decreases) in cash caused by changes in operating assets and liabilities:

Accounts receivable

Other current assets

3 unchanged sentences

Purchases of property and equipment

Proceeds from sale of property and equipment

In process research and development acquired from NanoTx Therapeutics

Purchase of intangible assets

In process research and development acquired

Net cash used in investing activities

Cash flows provided by (used in) financing activities:

Cash flows from financing activities:

Principal payments of long-term obligations

1 unchanged sentence

Proceeds from exercise of warrants

Proceeds from sale of common stock, net

Net cash provided by (used in) financing activities

Net increase (decrease) in cash and cash equivalents

Proceeds from sale of common stock

Net cash provided by financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of period

4 unchanged sentences

Unpaid offering cost

Right-of-use asset obtained in exchange for lease liabilities

Issuance costs paid in common stock

Common stock issued in payment for in process research and development

See Accompanying Notes to these Consolidated Condensed Financial Statements

See Accompanying Notes to these Condensed Financial Statements

PLUS THERAPEUTICS, INC.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

September 30, 2021

NOTES TO CONDENSED FINANCIAL STATEMENTS

March 31, 2022

Basis of Presentation and New Accounting Standards

The accompanying unaudited consolidated condensed financial statements as of September 30, 2021 and for the nine months ended September 30, 2021 and 2020 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

The accompanying unaudited condensed financial statements as of March 31, 2022 and for the three months ended March 31, 2022 and 2021 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information.

Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for annual financial statements.

The consolidated condensed balance sheet at December 31, 2020 has been derived from the audited financial statements at December 31, 2020, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

The condensed balance sheet at December 31, 2021 has been derived from the audited financial statements at December 31, 2021, but does not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation of the financial position and results of operations of Plus Therapeutics, Inc., and its subsidiaries (collectively, the “Company”) have been included.

Operating results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021.

These financial statements should be read in conjunction with the consolidated financial statements and notes therein included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on February 22, 2021.

Operating results for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the year ending December 31, 2022.

These financial statements should be read in conjunction with the financial statements and notes therein included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on February 24, 2022.

Recently Issued Accounting Pronouncements

5 unchanged sentences

Early adoption is permitted beginning in 2019.

The Company plans to adopt the new guidance on January 1, 2023, and it does not expect that adoption of this standard will have a material impact on its consolidated financial statements and related disclosures.

Recently Adopted Accounting Pronouncement

In December 2019, the FASB issued ASU No.

2019-12, Income Taxes, Simplifying the Accounting for Income Taxes (“ASU 2019-12”).

The new guidance eliminates certain exceptions related to the approach for intra-period tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences.

It also clarifies and simplifies other aspects of the accounting for income taxes.

ASU 2019-12 became effective for the Company on January 1, 2021 .

Adoption of ASU 2019-12 did not have a material impact on the Company’s consolidated financial statements.

In August 2020, the FASB issued ASU No.

2020-06, Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) (“ASU 2020-06”).

ASU 2020-06 eliminates the beneficial conversion and cash conversion accounting models for convertible instruments.

It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions.

In addition, ASU 2020-06 modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation.

The amendments in ASU 2020-06 are effective for smaller reporting companies as defined by the SEC for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

The Company adopted ASU 2020-06 as of January 1, 2021 , which did not have a material impact on its consolidated financial statements.

The Company plans to adopt the new guidance on January 1, 2023, and it does not expect that adoption of this standard will have a material impact on its financial statements and related disclosures.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S.

The preparation of financial statements in conformity with U.S.

generally accepted accounting principles requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period.

The Company’s most significant estimates and critical accounting policies involve reviewing assets for impairment, determining the assumptions used in measuring stock-based compensation expense and valuing warrants.

The Company’s most significant estimates and critical accounting policies involve reviewing assets for impairment, and determining the assumptions used in measuring stock-based compensation expense.

Actual results could differ from these estimates.

Management’s estimates and assumptions are reviewed regularly, and the effects of revisions are reflected in the consolidated financial statements in the periods they are determined to be necessary.

Liquidity and Going Concern

The Company incurred net losses of $ 9.2 million for the nine months ended September 30, 2021.

The Company had an accumulated deficit of $ 442.8 million as of September 30, 2021.

Additionally, the Company used net cash of $ 7.7 million to fund its operating activities for the nine months ended September 30, 2021.

These factors raise substantial doubt about the Company’s ability to continue as a going concern.

T he Company continues to seek additional capital through strategic transactions and from other financing alternatives.

Without additional capital, the Company’s current working capital will not provide adequate funding to make debt repayments or support its research and product development activities at their current levels.

Management’s estimates and assumptions are reviewed regularly, and the effects of revisions are reflected in the financial statements in the periods they are determined to be necessary.

The Company incurred net losses of $ 4.1 million for the three months ended March 31, 2022.

The Company had an accumulated deficit of $ 451.0 million as of March 31, 2022.

Additionally, the Company used net cash of $ 3.9 million to fund its operating activities for the three months ended March 31, 2022.

As disclosed in more detail in Note 9, the Company had entered into various financing agreements, and raised capital by issuing its common stock.

The Company believes its current cash and cash equivalents will be sufficient to fund its operations for at least the next 12 months from the date these financial statements are issued.

The Company continues to seek additional capital through strategic transactions and from other financing alternatives.

If sufficient capital is not raised, the Company will at a minimum need to significantly reduce or curtail its research and development and other operations, and this would negatively affect its ability to achieve corporate growth goals.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “Distribution Agreement”) with Canaccord Genuity LLC (“Canaccord”) pursuant to which it could issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 10,000,000 (the “ATM Shares”), depending on market demand, with Canaccord acting as an agent for sales.

Sales of the ATM Shares could be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended (the “Securities Act”), including, without limitation, sales made directly on or through the NASDAQ Capital Market.

Canaccord was required to use its commercially reasonable efforts to sell the ATM Shares the Company requested to be sold on its behalf, consistent with Canaccord’s normal trading and sales practices, under the terms and subject to the conditions set forth in the Distribution Agreement.

The Company did no t have an obligation to sell any of the ATM Shares.

The Company could instruct Canaccord not to sell the ATM Shares if the sales could not be effected at or above the price the Company designated from time to time and the Company could at any time suspend sales pursuant to the Distribution Agreement.

During the year ended December 31, 2020, the Company issued 1,616,331 shares under the Distribution Agreement for net proceeds of approximately $ 3.2 million.

During the nine months ended September 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million.

As of September 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

On September 30, 2020, the Company entered into a purchase agreement (the “2020 Purchase Agreement”) and a registration rights agreement with Lincoln Park Capital Fund, LLC (“Lincoln Park”), pursuant to which Lincoln Park committed to purchase up to $ 25.0 million of its common stock.

Under the terms and subject to the conditions of the 2020 Purchase Agreement, the Company has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase up to $25.0 million of its common stock.

Such sales of common stock by us, if any, will be subject to certain limitations, and may occur from time to time, at our sole discretion, over the 36 -month period commencing November 6, 2020, subject to satisfaction of certain conditions.

The net proceeds under the 2020 Purchase Agreement will depend on the frequency and prices at which the Company sells shares of its common stock to Lincoln Park.

During the year ended December 31, 2020, the Company issued 353,113 shares, excluding 180,701 shares issued as commitment fee, under the 2020 Purchase Agreement for net proceeds of approximately $ 0.7 million.

During the nine months ended September 30, 2021, the Company issued 5,535,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of $ 12.3 million.

Should the Company fail to raise additional cash from outside sources, this would have a material adverse impact on its operations .

The accompanying consolidated condensed financial statements have been prepared assuming the Company will continue to operate as a going concern, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from uncertainty related to its ability to continue as a going concer n.

Fair Value Measurements

8 unchanged sentences

Valuations derived from valuation techniques in which one or more significant inputs are unobservable in active markets.

Warrants issued in an underwritten public offering in September 2019 (“Series U Warrants”) are classified as liability instruments.

Because some of the inputs to the Company’s valuation model are either not observable or are not derived principally from or corroborated by observable market data by correlation or other means, the warrant liability is classified as Level 3 in the fair value hierarchy.

Certain w arrants issued in an underwritten public offering in September 2019 (“Series U Warrants”) are classified as liability instruments.

The Company estimated the fair value of the Series U Warrants with the Black Scholes model.

The Series U Warrants will be marked to market as of each balance sheet date until they are exercised or upon expiration, with the changes in fair value recorded as non-operating income or loss in the statements of operations.

September 30, 2021

December 31, 2020

Expected term

Common stock market price

Risk-free interest rate

Expected volatility

Resulting fair value (per warrant)

The following table summarizes the change in Level 3 warrant liability value for the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended

Nine Months Ended

Warrant liability

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

Beginning balance

Change in fair value

Reclassification to equity

Ending balance

As of March 31, 2022, the fair value of the Series U Warrants was immaterial, a nd the change in the fair value of liability classified Series U Warrants during the three months ended March 31, 2022 and 2021 was not material.

Term Loan Obligations

1 unchanged sentence

The Term Loan accrues interest at a floating rate of at least 8.95 % per annum, comprised of a three-month LIBOR rate with a floor of 1.00 % plus 7.95 %.

Pursuant to the Loan and Security Agreement, as amended, the Company is required to make interest only payments through May 1, 2021 and thereafter it is required to make payments of principal and accrued interest in equal monthly installments sufficient to amortize the Term Loan through September 1, 2024 , the maturity date.

At maturity of the Term Loan, or earlier repayment in full following voluntary prepayment or upon acceleration, the Company is required to make a final payment in an aggregate amount equal to approximately $ 3.2 million.

2 unchanged sentences

From September 2017 to March 2019, the Company entered into a total of seven amendments to the Term Loan which, amongst other things, extended the interest only period, required repayment of $ 3.1 million using the proceeds received from sale of the Company’s former UK and Japan subsidiaries in April 2019, increased the final payment, increased the final payment fee upon maturity or early repayment of the Term Loan, and increased the minimum liquidity covenant level to $ 2.0 million.

On March 29, 2020, the Company entered into the Ninth Amendment of the Loan and Security Agreement (the “Ninth Amendment”), pursuant to which Oxford agreed to defer the start date of principal repayment from May 1, 2020 to May 1, 2021 and extended the term of the Term Loan from September 1, 2021 to September 1, 2024 .

As the Company met the “Second I/O Extension Equity Event,” as defined in the Ninth Amendment, the principal repayment start date has been deferred to November 1, 2021.

The principal repayment start date was further deferred to November 1, 2021.

In addition, pursuant to the Ninth Amendment, on April 1, 2020, the Company made a $ 5.0 million paydown of principal upon execution of the Ninth Amendment and $ 0.3 million of related final payment.

After giving effect to this payment, $ 4.3 million of principal remains outstanding under the Term Loan.

In addition, an amendment fee of $ 1.0 million will be payable in connection with the Amendment at the earlier of the maturity date, acceleration of the loans and the making of certain prepayments.

In addition, an amendment fee of $ 1.0 million will be payable in connection with the Ninth Amendment at the earlier of the maturity date, acceleration of the loans and the making of certain prepayments.

All other major terms remained consistent.

Under authoritative guidance, the Ninth Amendment does not meet the criteria to be accounted for as a troubled debt restructuring.

In addition, the Company performed a quantitative analysis and determined that the terms of the new debt and

original debt instrument are not substantially different.

In addition, the Company performed a quantitative analysis and determined that the terms of the new debt and original debt instrument are not substantially different.

Accordingly, the Ninth Amendment is accounted for as debt modification.

2 unchanged sentences

The intellectual property asset collateral will be released upon the Company achieving a certain liquidity level when the total principal outstanding under the Loan and Security Agreement is less than $ 3 million.

As of September 30, 2021, there was $ 4.3 million principal amount outstanding under the Term Loan, excluding the $ 3.2 million final payment fee, and the Company was in compliance with all of the debt covenants under the Loan and Security Agreement.

The Company’s interest expense for the three months ended September 30, 2021 and 2020 was $ 0.2 million and $ 0.3 million, respectively.

The Company’s interest expense for the nine months ended September 30, 2021 and 2020 was $ 0.7 million and $ 0.9 million, respectively.

As of March 31, 2022, there was $ 3.6 million principal amount outstanding under the Term Loan, excluding the $ 3.2 million final payment fee, and the Company was in compliance with all of the debt covenants under the Loan and Security Agreement.

The Company’s interest expense for each of the three months ended March 31, 2022 and 2021 was $ 0.2 million.

Interest expense is calculated using the effective interest method;

therefore it is inclusive of non-cash amortization in the amount of $ 0.1 million for each of the three months ended September 30, 2021 and 2020, and $ 0.4 million for each of the nine months ended September 30, 2021 and 2020, respectively, related to the amortization of the debt discount, capitalized loan costs, and accretion of final payment.

therefore it is inclusive of non-cash amortization in the amount of $ 0.1 million for each of the three months ended March 31, 2022 and 2021, related to the amortization of the debt discount, capitalized loan costs, and accretion of final payment.

The Loan and Security Agreement, as amended, contains customary indemnification obligations and customary events of default, including, among other things, the Company’s failure to fulfill certain obligations under the Term Loan, as amended, and the occurrence of a material adverse change, which is defined as a material adverse change in the Company’s business, operations, or condition (financial or otherwise), a material impairment of the prospect of repayment of any portion of the loan.

In the event of default by the Company or a declaration of material adverse change by its lender, under the Term Loan, the lender would be entitled to exercise its remedies thereunder, including the right to accelerate the debt, upon which the Company may be required to repay all amounts then outstanding under the Term Loan, which could materially harm the Company’s financial condition.

As of September 30, 2021, the Company has not received any notification or indication from Oxford to invoke the material adverse change clause.

However, due to the Company’s current cash flow position and the substantial doubt about its ability to continue as a going concern, the entire principal amount of the Term Loan is presented as short-term.

The Company will continue to evaluate the debt classification on a quarterly basis and evaluate for reclassification in the future should its financial condition improve.

As of March 31, 2022, the Company has not received any notification or indication from Oxford to invoke the material adverse change clause.

Loss per Share

3 unchanged sentences

The following were excluded from the diluted loss per share calculation for the periods presented because their effect would be anti-dilutive:

Nine Months Ended September 30,

As of March 31,

Outstanding stock options

Outstanding warrants

Preferred stock

Outstanding warrants

Commitments and Contingencies

1 unchanged sentence

If both criteria are met, the Company calculates the associated lease liability and corresponding right-of-use asset upon lease commencement using a discount rate based on the rate implicit in the lease or an incremental borrowing rate commensurate with the term of the lease.

Lease renewable options are included in the estimation of lease term when it is reasonably certain that the Company will exercise such options.

The Company records lease liabilities within current liabilities or long-term liabilities based upon the length of time associated with the lease payments.

The Company records its operating lease right-of-use assets as long-term assets.

Right-of-use assets for financing leases are recorded within property and equipment, net in the balance sheet.

Leases with an initial term of 12 months

or less are not recorded on the b alance s heet.

Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term.

Right-of-use assets for finance leases are recorded within property and equipment, net in the condensed balance sheets.

Leases with an initial term of 12 months or less are not recorded on the condensed balance sheets.

Instead, the Company recognizes lease expense for these leases on a straight-line basis over the lease term in the condensed statements of operations.

The Company leases laboratory, office and storage facilities in San Antonio, Texas, under operating lease agreements that expire in 2025 .

On October 1, 2021, the operating lease in San Antonio, Texas was amended so that the lease would expire in February 2025 , with a 3 % increase to the previously agreed-on annual minimum lease payments.

The Company also leases certain office space in Austin, Texas under a month-to-month operating lease agreement.

On March 1, 2021, the Company entered into a lease agreement for office space in Charlottesville, Virginia (the “Charlottesville Lease”).

The Charlottesville Lease has a term of 12 months and is renewable for four additional one-year periods.

The minimum lease payment is $ 30,000 for the first twelve months, subject to a 3 % annual increase if and when the lease is renewed.

The lease commencement date is April 1, 2021 and currently expires on March 31, 2023 .

The Company measured the operating lease right-of-use asset and related lease liability related to the Charlottesville Lease as of the lease commencement date.

In addition, the Company has entered into leases for certain equipment under various operating and finance leases.

As of September 30, 2021, contractual terms of all finance leases had expired and the Company did not have any right-of-use assets or lease liabilities relating to finance leases.

During 2021, contractual terms of all finance leases had expired and the Company did not have any right-of-use assets or lease liabilities relating to finance leases as of March 31, 2022.

The Company’s existing operating lease agreements generally provide for periodic rent increases, and renewal and termination options.

The Company’s lease agreements do not contain any material variable lease payments, residual value guarantees or material restrictive covenants.

The Charlottesville Lease has a term of 12 months and is renewable for four additional one-year periods.

The minimum lease payment is $ 30,000 for the first twelve months, subject to a 3 % annual increase if and when the lease is renewed.

The lease commencement date was April 1, 2021 .

At lease inception, the Company believed that it was reasonably certain that it would renew the Charlottesville Lease beyond its initial 12 months term to 36 months in total.

As a result, the Company recorded the operating lease right-of-use asset and related lease liability related to the Charlottesville Lease as of the lease commencement date, using the applicable discount rate of 8.95 %.

Certain leases require the Company to pay taxes, insurance, and maintenance.

1 unchanged sentence

The Company elected the package of practical expedients and therefore does not separate non-lease components from lease components.

The table below summarizes the Company’s operating lease liabilities and corresponding right-of-use assets (in thousands, except years and rates):

September 30, 2021

Total leased assets

Total lease liabilities

Weighted-average remaining lease term (years) - operating leases

Weighted-average discount rate - operating leases

The table below summarizes the Company’s lease costs from its unaudited consolidated condensed statement of operations, and cash payments from its unaudited consolidated condensed statement of cash flows during the three and nine months ended September 30, 2021 and 2020 (in thousands):

Three Months Ended

Nine Months Ended

September 30, 2021

September 30, 2020

September 30, 2021

September 30, 2020

The Company’s operating lease liabilities and corresponding right-of-use assets are included in the condensed balance sheets.

As of March 31, 2022, weighted average discount rate used to measure operating lease liabilities and the operating leases remaining term were 9.0 % and 2.82%, respectively.

The table below summarizes the Company’s lease costs from its unaudited condensed statement of operations, and cash payments from its unaudited condensed statement of cash flows during the three months ended March 31, 2022 and 2021 (in thousands):

Three Months Ended March 31,

Lease expense:

2 unchanged sentences

Depreciation of right-of-use assets

Interest expense on lease liabilities

Total lease expense

1 unchanged sentence

Operating cash used for operating leases

Financing cash used for financing leases

Financing cash used for finance leases

Total cash paid for amounts included in the measurement of lease liabilities

Total rent expenses for the nine months ended September 30, 2021 and 2020 was $ 170,000 and $ 177,000 , respectively, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.

The Company’s future minimum annual lease payments under operating and financing leases at September 30, 2021 are as follows (in thousands):

Total rent expenses for the three months ended March 31, 2022 and 2021 were $ 60,000 and $ 50,000 , respectively, which includes leases in the table above, month-to-month operating leases, and common area maintenance charges.

The Company’s future minimum annual lease payments under operating leases at March 31, 2022 are as follows (in thousands):

Operating Leases

Remaining 2021

Remainder of 2022

Total minimum lease payments

3 unchanged sentences

Noncurrent lease obligations

Services Agreement and Statement of Work with Medidata

On March 31, 2022, the Company and Medidata Solutions, Inc.

(“Medidata”) entered into a Statement of Work (the “SOW”), pursuant to which Medidata will build a Sythetic Control Arm ® (SCA) platform that facilitates the use of historical clinical data to incorporate into the Company’s Phase 2 clinical trial of Rhenium-186 NanoLiposome ( 186 RNL) in recurrent glioblastoma (“GBM”).

The SOW is governed under the terms of a services agreement (the “Services Agreement”), dated November 5, 2021.

The SOW has a term of six (6) months.

The Company will pay Medidata $ 1.45 million in managed services fees and a contingent managed services fee of $ 150,000 if the U.S.

Food & Drug Administration approves a path forward for the Company to use the SCA in its clinical trial of 186 RNL for treatment of GBM.

The SOW may only be terminated for a material breach by either party or if the clinical study’s authorization or approval is withdrawn by a regulatory agency.

Piramal Master Services Agreement

2 unchanged sentences

The MSA includes the transfer of analytical methods, development of microbiological methods, process transfer and optimization, intermediate drug product manufacturing, and stability studies for the Company , which has been initiated at Piramal’s facility located in Lexington, Kentucky.

The parties contemplate that the MSA will lead to clinical and commercial supply agreements between the Company and Piramal.

The MSA has a term of five years and will automatically renew for successive one-year terms unless either party notifies the other no later than six months prior to the original term or any additional terms of its intention to not renew the MSA.

6 unchanged sentences

The timing of payments due under these agreements is estimated based on current study progress.

As of September 30, 2021 , the Company did no t have any clinical research study obligations.

As of March 31, 2022 , the Company did no t have any clinical research study obligations.

Legal proceedings

1 unchanged sentence

(“Lorem”) in the District Court for the District of Delaware.

The complaint alleges false representations were made to Lorem regarding the manufacturing facility in the United Kingdom (the “UK Facility”) that Lorem purchased from the Company under the Equity Purchase Agreement, dated March 29, 2019, between the Company and Lorem (the “Lorem Agreement”).

The complaint alleges false representations were made to Lorem regarding the manufacturing facility in the United Kingdom (the “UK Facility”) that Lorem purchased from the Company under the Asset and Equity Purchase Agreement, dated March 29, 2019, between the Company and Lorem (the “Lorem Agreement”).

Lorem also claims that false representations were made regarding the UK Facility’s certification to sell and distribute devices in the European Union and export such devices to China.

In connection with these allegations, Lorem claims entitlement to at least $ 6,000,000 in compensatory damages and operational costs and expenses (collectively, the “Lorem Claim”).

The Company believes that the claims from Lorem are without merit and intends to vigorously defend the case and on August 12, 2021, the Company filed a Motion to Dismiss asking the District Court to dismiss the Lorem Claim.

Lorem filed an opposition on September 9, 2021, which we responded to on September 30, 2021.

As of October 21, 2021, the Company is waiting for the District Court’s decision on our motion.

No liability was accrued as of September 30, 2021.

The Company believes that the Lorem Claim is without merit and is vigorously defending the case.

No liability was accrued as of March 31, 2022.

The Company is subject to various claims and contingencies related to legal proceedings.

1 unchanged sentence

Management assesses the probability of loss for such contingencies and accrues a liability and/or discloses the relevant circumstances, as appropriate.

License Agreements

UT Health Science Center at San Antonio (“UTHSA”) License Agreement

On December 31, 2021, the Company entered into a Patent and Know-How License Agreement (the “UTHSA License Agreement”) with The University of Texas Health Science Center at San Antonio, pursuant to which UTHSA granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of biodegradable alginate microspheres (BAM) containing nanoliposomes loaded with imaging and/or therapeutic payloads.

Pursuant to the UTHSA License Agreement, the Company was required to make an upfront payment, which was recorded as in-process research and development acquired in the condensed statement of operations for the year ended December 31, 2021.

The upfront payment was paid in cash in January 2022.

NanoTx License Agreement

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(“NanoTx”) entered into a Patent and Know-How License Agreement (the “NanoTx License Agreement”), pursuant to which NanoTx granted the Company an irrevocable, perpetual, exclusive, fully paid-up license, with the right to sublicense and to make, develop, commercialize and otherwise exploit certain patents, know-how and technology related to the development of radiolabeled nanoliposomes.

On May 7, 2020, all closing conditions under the NanoTx License Agreement were satisfied and the Company paid an upfront payment of $ 400,000 in cash and issued 230,769 shares of its common stock to NanoTx.

Cash and the fair value of common stock issued totaled $ 781,000 and is recorded as in-process research and development expenses, pursuant to authoritative literature for asset acquisition, in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2020.

Pursuant to the terms of the NanoTx License Agreement, the Company may be required to pay up to $ 136.5 million in development and sales milestone payments and a tiered single-digit royalty on U.S.

and European sales.

On May 7, 2020, all closing conditions under the NanoTx License Agreement were satisfied and the Company paid an upfront cash payment and issued 230,769 shares of its common stock to NanoTx.

Cash and the fair value of common stock issued is recorded as in-process research and development expenses, pursuant to authoritative literature for asset acquisition, in the statement of operations and comprehensive loss for the year ended December 31, 2020.

Stockholders’ Equity

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There were no shares of Series A 3.6 % Convertible Preferred Stock immediately prior to September 21, 2021, or December 31, 2020.

There were 1,014 and 1,016 shares of Series B Convertible Preferred Stock outstanding as of September 30, 2021 and December 31, 2020, respectively.

There were 938 shares of Series C Preferred Stock outstanding as of each of September 30, 2021 and December 31, 2020.

As of September 30, 2021, there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 416,889 shares of common stock, and 1,014 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 5,978 shares of common stock.

There were 1,014 shares of Series B Convertible Preferred Stock outstanding as of March 31, 2022 and December 31, 2021.

There were 938 shares of Series C Preferred Stock outstanding as of March 31, 2022 and December 31, 2021.

As of March 31, 2022, there were 938 outstanding shares of Series C Preferred Stock that can be converted into an aggregate of 416,889 shares of common stock, and 1,014 shares of Series B Convertible Preferred Stock that can be converted into an aggregate of 5,978 shares of common stock.

On September 25, 2019, the Company completed an underwritten public offering.

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In accordance with authoritative guidance, the pre-funded warrants are classified as equity.

The Series U Warrants and the Representative Warrants are classified at issuance as liabilities due to a contingent obligation for the Company to settle the Series U Warrants with cash upon certain change in control events.

Between April and September 2020, the Company entered into revised warrant agreements with the holders of 3,447,500 Series U Warrants (the “Warrant Amendments”).

In return for reducing the strike price of the warrants to $ 2.25 per share, the warrant holders agreed to amend the settlement provisions upon a fundamental transaction such that the warrants would meet the requirements to be classified within stockholders’ equity.

In September 2020, the Company entered into revised warrant agreements for the Representative Warrants that reduced the strike price of the warrants to $ 2.81 per share, and the warrant holders agreed to amend the settlement provisions upon a fundamental transaction such that the Representative Warrants would meet the requirements to be classified within stockholders’ equity.

Accordingly, approximately $ 4.5 million of warrant liability was reclassified to stockholders’ equity on the respective effective date of the Warrant Amendments.

In addition, approximately $ 0.7 million of other income representing change in the fair value of amended warrants from April 1, 2020 to the respective effective date of the Warrant Amendments is recorded in the consolidated statement of operations for the year ended December 31, 2020.

As of September 30, 2021, there were 2,141,000 outstanding Series U Warrants which can be exercised into an aggregate of 2,141,000 shares of common stock.

The Series U Warrants and the Representative Warrants were initially classified at issuance as liabilities due to a contingent obligation for the Company to settle the Series U Warrants with cash upon certain change in control events.

In 2020, all but 2,500 Series U Warrants were amended and met the requirements to be classified within stockholder’s equity.

As of March 31, 2022, there were 2,141,000 outstanding Series U Warrants which can be exercised into an aggregate of 2,141,000 shares of common stock.

Lincoln Park Purchase Agreement

On September 30, 2020, the Company entered into the 2020 Purchase Agreement and registration rights agreement pursuant to which Lincoln Park committed to purchase up to $ 25.0 million of the Company’s common stock.

Such sales of common stock by the Company are subject to certain limitations, and may occur from time to time, at the Company’s sole discretion, over the 36-month period commencing on November 6, 2020, subject to the satisfaction of certain conditions.

The 2020 Purchase Agreement provides that the number of shares the Company may sell to Lincoln Park on any single business day in a regular purchase is 50,000 , but that amount may be increased up to 100,000 shares, depending upon the market price of the Company’s common stock at the time of sale and subject to a maximum limit of $ 500,000 per regular purchase.

The purchase price per share for each such regular purchase is based on prevailing market prices of the Company’s common stock immediately preceding the time of sale as computed under the 2020 Purchase Agreement.

In addition to regular purchases, the Company may also direct Lincoln Park to purchase other amounts as accelerated purchases or as additional accelerated purchases if the closing sale price of the common stock exceeds certain threshold prices as set forth in the 2020 Purchase Agreement.

There are no trading volume requirements or restrictions under the Lincoln Park Purchase Agreement.

There is no upper limit on the price per share that Lincoln Park must pay for common stock under a regular purchase or an accelerated purchase and in no event will shares be sold to Lincoln Park on a day when the Company’s common stock closing sale price is less than $ 0.25 per share.

Under the terms and subject to the conditions of the 2020 Purchase Agreement, the Company had the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park was obligated to purchase up to $ 25.0 million of the Company’s common stock.

Such sales of common stock by the Company were subject to certain limitations, and could occur from time to time, at the Company’s sole discretion, over the 36-month period commencing on November 6, 2020, subject to the satisfaction of certain conditions.

On June 16, 2020, the Company received stockholder approval to permit issuances of the Company’s common stock (including the issuance of more than 19.99 % of the Company’s common stock) to Lincoln Park pursuant to the 2020 Purchase Agreement.

Based on the closing price of the Company’s common stock of $ 1.05 per share on March 16, 2020, the maximum number of shares the Company can issue and sell under the 2020 Purchase Agreement is approximately 23.8 million shares.

Based on the closing price of the Company’s common stock of $ 1.05 per share on March 16, 2020, the maximum number of shares the Company could issue and sell under the 2020 Purchase Agreement is approximately 23.8 million shares.

Accordingly, the Company requested and received stockholder approval for the issuance of up to 23.8 million shares of the Company’s common stock under the 2020 Purchase Agreement.

The Company would seek additional stockholder approval before issuing more than 23.8 million shares.

Lincoln Park has no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park is obligated to make purchases as the Company directs, subject to certain conditions.

Actual sales of shares of common stock to Lincoln Park under the 2020 Purchase Agreement will depend on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations.

The net proceeds under the 2020 Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells shares of its stock to Lincoln Park.

During the year ended December 31, 2020, the Company issued 353,113 shares, excluding 180,701 shares issued as a commitment fee, of common stock under the 2020 Purchase Agreement for total net proceeds of approximately $ 0.7 million.

During the nine months ended September 30, 2021, the Company issued 5,535,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 12.3 million.

Lincoln Park had no right to require the Company to sell any shares of common stock to Lincoln Park, but Lincoln Park was obligated to make purchases as the Company directs, subject to certain conditions.

Actual sales of shares of common stock to Lincoln Park under the 2020 Purchase Agreement depended on a variety of factors to be determined by the Company from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the Company as to the appropriate sources of funding for the Company and its operations.

The net proceeds under the 2020 Purchase Agreement to the Company depended on the frequency and prices at which the Company sold shares of its stock to Lincoln Park.

During the year ended December 31, 2021, the Company issued 5,685,186 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 12.5 million.

During the three months ended March 31, 2022, the Company issued 5,665,000 shares of its common stock under the 2020 Purchase Agreement for net proceeds of approximately $ 7.0 million.

The Company no longer has any additional shares of common stock registered to sell under the 2020 Purchase Agreement.

At-the-market Issuances

On October 23, 2020, the Company entered into the Distribution Agreement with Canaccord Genuity LLC (“Canaccord”), pursuant to which the Company issued and sold the ATM Shares, depending on market demand, with Canaccord acting as an agent for sales.

On January 14, 2022, the Company entered into an Equity Distribution Agreement (the “2022 Distribution Agreement”) with Canaccord Genuity LLC ( “Canaccord”), pursuant to which the Company may issue and sell, from time to time, shares of its common stock having an aggregate offering price of up to $ 5,000,000 shares (the “Shares”), with Canaccord acting as an agent for sales.

Canaccord will use its commercially reasonable efforts to sell the Shares requested by the Company to be sold on its behalf.

The Company has no obligation to sell any of the Shares.

The Company may instruct Canaccord not to sell the Shares if the sales cannot be effected at or above the price designated by the Company from time to time and the Company may at any time suspend sales pursuant to the 2022 Distribution Agreement.

During the three months ended March 31, 2022, the Company issued 1,022,610 shares under the 2022 Distribution Agreement for net proceeds of approximately $ 0.7 million.

On October 23, 2020, the Company entered into an Equity Distribution Agreement (the “2020 Distribution Agreement”) with Canaccord.

The Company had no obligation to sell any of the ATM Shares and it could instruct Canaccord not to sell the ATM Shares if the sales could not be effected at or above the price the Company designated from time to time and the Company could at any time suspend sales pursuant to the 2020 Distribution Agreement.

During the year ended December 31, 2020, the Company issued 1,616,331 shares under the Distribution Agreement for net proceeds of approximately $ 3.2 million.

During the nine months ended September 30, 2021, the Company issued 2,179,193 shares under the Distribution Agreement for net proceeds of $ 6.3 million .

As of September 30, 2021, there were no remaining shares that may be issued and sold under the Distribution Agreement.

During the year ended December 31, 2021, the Company issued 2,179,193 shares under the 2020 Distribution Agreement for net proceeds of $ 6.3 million.

The 2020 Distribution Agreement has been terminated.

Stock-based Compensation

Under the Company’s amended 2015 New Employee Incentive Plan (the “2015 Plan”), awards may be granted to employees who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as a material inducement to entering into employment with the Company.

As of September 30, 2021, there were 210,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

On May 17, 2021, the stockholders of the Company approved an amendment and restatement to the Company’s 2020 Stock Incentive Plan (the “2020 Plan”) to increase the total number of shares of common stock reserved for issuance under the 2020 Plan by 1,000,000 shares.

On February 6, 2020, the Company amended the Company’s 2015 New Employee Incentive Plan (the “2015 Plan”) to increase the total number of shares of common stock reserved for issuance under the plan by 250,000 shares.

Awards may only be granted under the 2015 Plan to employees who were not previously an employee or director of the Company, or following a bona fide period of non-employment, as a material inducement to entering into employment with the Company.

As of March 31, 2022, there were 90,389 shares of common stock remaining and available for future issuances under the 2015 Plan.

On June 16, 2020, the stockholders of the Company approved the Company’s 2020 Stock Incentive Plan (the “2020 Plan”), which replaced the Company’s 2014 Equity Incentive Plan.

The 2020 Plan provides for the award or sale of shares of common stock (including restricted stock), the award of stock units and stock appreciation rights, and the grant of both incentive stock options to purchase common stock.

The 2020 Plan provides for the number of shares available for issuance to be increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan (as replaced by the 2020 Plan) are forfeited or expire (except as otherwise provided in the 2020 Plan).

As of September 30, 2021, there were 640,212 shares remaining and available for future issuances under the 2020 Plan.

Generally, options issued under the 2020 Plan are subject to a one-year , two-year or four-year vesting schedule, with options vesting in equal installments on the monthly anniversary of the grant date and have a contractual term of 10 years.

A summary of activity for the nine months ended September 30, 2021 is as follows:

The 2020 Plan provides for the issuance of up to 550,000 shares of common stock, and the number of shares available for issuance will be increased to the extent that awards granted under the 2020 Plan and the Company’s 2014 Equity Incentive Plan are forfeited or expire (except as otherwise provided in the 2020 Plan).

On May 17, 2021, the stockholders of the Company approved an amendment and restatement to the 2020 Plan to increase the total number of shares of common stock reserved for issuance under the 2020 Plan by 1,000,000 shares.

As of March 31, 2022, there were 640,212 shares remaining and available for future issuances under the 2020 Plan.

Generally, options issued under the 2020 Plan are subject to a two-year or four-year vesting schedule with 25 % of the options vesting one year anniversary of the grant date followed by equal monthly installment vesting, and have a contractual term of 10 years.

A summary of activity for the three months ended March 31, 2022 is as follows:

Exercise Price

Weighted Average Remaining Contractual Life (years)

Intrinsic Value (in $,000)

Outstanding as of December 31, 2020

Intrinsic Value

Balance as of December 31, 2021

Cancelled/forfeited

Outstanding as of September 31, 2021

Vested as of September 30, 2021

Vested and expected to be vested as of September 30, 2021

As of September 30, 2021, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.5 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 3.0 years .

Balance as of March 31, 2022

Vested and expected to vest at March 31, 2022

Exercisable at March 31, 2022

As of March 31, 2022, the total compensation cost related to non-vested stock options not yet recognized for all the Company’s plans is approximately $ 1.3 million, which is expected to be recognized as a result of vesting under service conditions over a weighted average period of 2.79 years .

COVID-19 Pandemic and CARES Act

The COVID-19 pandemic has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world.

A novel strain of coronavirus (COVID-19) was declared a global pandemic by the World Health Organization in March 2020.

COVID-19 has presented substantial public health and economic challenges and is affecting economies, financial markets and business operations around the world.

While the Company has implemented additional health and safety precautions and protocols in response to the pandemic and government guidelines, the Company has not experienced a significant impact on its business and operations.

However, the Company may experience disruptions that could adversely impact its business operations as well as its preclinical studies and clinical trials.

The Company is currently continuing the clinical trials it has underway in sites across the U.S., and, although there has been no significant impact to date, the Company expects that COVID-19 precautions may directly or indirectly impact the timeline for some of its clinical trials.

Some of the Company’s clinical trial sites, including those located in areas severely impacted by the pandemic, placed new patient enrollment into clinical trials on hold or, for patients traveling from out-of-state, implemented a 14-day self-quarantine before appointments.

In addition, some clinical trial sites imposed limited accessibility to conduct clinical monitoring and training on-site.

As the accessibility of vaccines against COVID-19 and the number of adults who have received a vaccine has increased, several of the restrictions have been eased or lifted entirely.

The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its consolidated financial statements and determined that there were no material adverse impacts on the Company’s results of operations and financial position at September 30, 2021.

The Company considered the impacts of COVID-19 on the assumptions and estimates used to prepare its financial statements and determined that there were no material adverse impacts on the Company’s results of operations and financial position at March 31, 2022.

The full extent to which the COVID-19 pandemic will directly or indirectly impact its business, results of operations and financial condition, will depend on future developments that are highly uncertain, including as a result of new information that may emerge concerning COVID-19 and the actions taken to contain or treat it, as well as the economic impact on local, regional, national and international markets.

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) was signed into law on March 27, 2020.

The CARES Act, among other things, includes tax provisions relating to refundable payroll tax credits, deferment of employer’s social security payments, net operating loss utilization and carryback periods, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property (QIP).

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2020 or the nine months ended September 30, 2021.

The programs under the CARES Act expired on September 6, 2021.

In response to the COVID-19 pandemic, the CARES Act was signed into law on March 27, 2020.

The CARES Act had no material impact on the Company’s income tax provision for the year ended December 31, 2021 or the three months ended March 31, 2022.

The Company continues to evaluate the impact of the CARES Act on its financial position, results of operations and cash flows.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements